BYU | Financial Aid - Subsidized Stafford Loans

Federal subsidized Stafford Loans are low-interest, federally subsidized loans made available to eligible students from lending institutions to assist in paying educational expenses. If you have previous federal subsidized Stafford Loans from an out-of-state lender, we advise you to continue to use the same lender. Otherwise, we recommend using a Utah lender. Before applying for a subsidized Stafford Loan, you should first consider other forms of aid such as savings, family assistance, part-time employment, grants, scholarships, and awards.

Choosing a Stafford Loan Lender

Most students at BYU choose to borrow their Stafford Loans from Utah lenders because electronic data transmission makes this a quick and efficient process. We do not currently transmit data electronically to any out-of-state lenders or guarantee agencies.

Many banks and credit unions participate in the Stafford Loan programs, but many others do not. You should be aware of certain differences among those lenders who do participate:

Credit unions require that you establish an account with them before they will process a student loan for you; most banks do not.
Some lenders may hold the loan until it is fully paid off, but most will sell the loan to the "secondary market" for servicing and collection, etc.

You should also be aware that some guarantee agencies charge a guarantee fee, whereas others waive this fee. Contact your proposed lender or guarantee agency if you have questions about their participation or their policies.

Eligibility

In addition to meeting the general federal requirements in the Federal Financial Aid section, you must:

Be admitted to a BYU degree-seeking program for a current or future enrollment period during the academic year.
Be enrolled at least half-time (6 hours per semester/ 3 hours per term for undergraduates; 4.5 hours per semester/ 2.5 hours per term for graduates) during the entire period of your loan. If you withdraw during the semester, you will forfeit your remaining eligibility and may have to return some monies received. These hours cannot include audit hours, noncredit courses, or challenge credit.
Apply for a federal Pell Grant (undergraduates only).
Not have borrowed in excess of the annual (or aggregate) loan limits.
Make certain that loan eligibility is determined and awarded before your last day of eligible enrollment.

Entrance Counseling

If this is your first Stafford Loan at Brigham Young University , even if you have had previous Stafford Loans at other schools, you must attend an Entrance Counseling session before any Stafford Loan funds can be credited to your student account through Electronic Funds Transfer (EFT), or a hard copy check can be delivered to you. To learn about the Entrance Counseling times/locations, please refer to Entrance Counseling.

Note:If you have not attended Entrance Counseling by the time your loan funds arrive at BYU, you will only have 3 days to complete it. If you do not attend entrance counseling in this time frame, your loan will be canceled. This three-day time frame can generally be extended if you contact Student Financial Services within those 3 days. Call them at 422-4104 or visit D-155 ASB to discuss the situatuion.

Avoiding Overawards

You cannot receive a loan in excess of your need analysis (see information on the FAFSA/Renewal Application). You will be asked to disclose all sources of financial aid, including scholarships, grants, loans, etc. If your loan, in combination with this other aid, exceeds your need, we may have to reduce the loan. If you have already picked up the check, you may be required to repay part of the loan immediately. We will not be able to complete processing your loan until all scholarships have been awarded.

If you are receiving your first federal loan at BYU, you must attend entrance counseling before receiving your first disbursement. Listings of times and dates of entrance counseling will be sent with your loan application/promissory note, and posted on VIP; click Awards.

Interest and Fees

The interest rate on federal subsidized and unsubsidized Stafford Loans is a fixed 6.8% annual percentage rate.

Subsidized Stafford Loans do not grow interest while you are enrolled on at least a half-time basis. They also do not grow interest during your six month grace period. However, Unsubsidized Stafford Loans do grow interest while you are in school.

Check Delivery

If your Stafford loan disbursement is greater than your current charges for tuition, fees and on-campus housing, a residual deposit will be made to your checking account after you authorize direct deposit.

The university encourages all students to authorize direct deposit. If you have not already done so, please go to Route Y and select My Financial Account and then select Authorize Direct Deposit.

If you have a residual loan amount and choose not to authorize direct deposit, then a check will be mailed to your current local mailing address. The address used can be verified by accessing Route Y, then Update Personal Information.

For the 2007-2008 academic year, the earliest direct deposits can be made is as follows:

	First Installment Deliveries	Second Installment Deliveries
Fall Loans	August 31, 2007
Fall/Winter Loans	August 31, 2007	January 7, 2008
Winter Loans	January 7, 2008
Winter/Spring Loans	January 7, 2008	April 28, 2008
Winter/Spring/Summer Loans	January 7, 2008	April 28, 2008
Spring Loans	April 28, 2008
Spring/Summer Loans	April 28, 2008	June 20, 2008
Summer Loans	June 20, 2008

Salt Lake Center students must contact Carol Lynne Malin regarding all matters relative to loan disbursements.

Annual Stafford Loan Limits

The following limits are in effect beginning July 1, 2007.

Maximum Stafford Loan Limits
Class Standing	Dependent Undergraduate	Independent Undergraduate	Graduate/Marriott/Law
Freshman (0-29 credits)	$3,500	$7,500 - No more than $3,500 of this amount may be in subsidized loans.	$20,500—No more than $8,500 of this amount may be in subsidized loans.
Sophomore (30 - 59 credits)	$4,500	$8,500—No more than $4,500 of this amount may be in subsidized loans.
Junior and Senior (60+ credits)	$5,500	$10,500—No more than $5,500 of this amount may be in subsidized loans.
Maximum limit for all school years	$23,000	$46,000—No more than $23,000 of this amount may be in subsidized loans.	$138,500—No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes Stafford Loans received for undergraduate study.

NOTE: The amounts in the chart above are the maximum amounts that you may borrow for the academic year. You might receive less than the maximum if you receive other financial aid that is used to cover a portion of your cost of attendance. The maximum amount you may borrow will also be less in certain situations, such as if you are enrolled for less than an academic year.

* Dependent students whose parents are denied a PLUS loan may receive additional unsubsidized Stafford up to the Independent Undergraduate limit.

Electronic Funds Transfer (EFT)

All Utah lenders transmit federal student loan funds electronically to BYU, which are then credited to your student account to pay tuition and fees. Any funds in excess of current charges will be issued to you by check.

All loans issued for a fall/winter loan period are disbursed in two installments. The fall installment is generally available at the end of August and the winter installment early in January.

If your lender is not located in Utah, they will send a physical check (rather than sending the money EFT). This generally adds a day or two (or more) to the process and timeframe of receiving your loan money.

Repayment

As long as you are enrolled in school at least half-time, no interest is charged and no monthly payments are required.
Six months after you drop below half-time enrollment you must begin making payments, and interest on subsidized loans will begin to accrue.

Deferment and Forbearance

After the end of your six-month grace period or during repayment, you may qualify for a deferment or forbearance. During a deferment, your lender suspends your payments and the government pays the interest on a subsidized loan. You may receive a deferment for enrollment half-time in school, for unemployment, or for economic hardship. Your lender will be able to tell you if your circumstances qualify you for a deferment. During a forbearance your lender suspends your payments, but you will either be required to pay interest on a quarterly basis or accept the accruing interest that will be added to the balance of your loan.

Avoiding Delinquency and Default

Your student loan is a long-term legal and financial obligation. Understanding the terms and conditions of the loan will help you successfully pay your debt and avoid the consequences of delinquency and default. If you fail to make required payments for 90 days, your loan is delinquent. If 270 days pass without payment, you are in default. The consequences of default are:

The entire unpaid balance of the loan becomes immediately due.
Holds are placed on admission, registration, and transcripts.
National credit bureaus are notified, affecting one's credit rating and future ability to borrow money.
Federal and state income tax refunds will be withheld and wages may be garnished.

To Apply

See the Application Checklist.